Aeroflot expands despite the downturn

AEROFLOT, the Russian airline once synonymous with surly service and safety problems, is putting its past behind it with a major fleet expansion programme – despite the current aviation downturn.

Aeroflot has banned alcohol on some long-haul flightsPhoto: Reuters

By Alistair Osborne, Business Editor

9:36PM GMT 09 Dec 2008

The carrier, which is 52pc state-owned, is bucking the current trend to scale back on aircraft orders as the global recession takes hold by pressing ahead with plans to raise it fleet from 85 planes to between 130 and 150 by 2018.

It has just taken delivery of the first of 10 Airbus 330-200 aircraft, ordered to improve its long-haul flying capability. The first aircraft will serve the Moscow-Shanghai route, with the second due to arrive later this month earmarked for Moscow-Tokyo.

Lev Koshliakov, Aeroflot's director general of public affairs, admitted Aeroflot was still struggling to put its past image behind it.

"It's certainly very hard to break this old concept but at least those who are interested in the Russian market will know that we have changed," he said.

He said the carrier would carry 9m passengers this year - or 11m including subsidiary companies – and has been experiencing strong volume growth.

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"The Russian market has grown 15pc-18pc annually for the last 15 years," he said. "This growth cannot be sustained right now in the financial crisis but we would still have growth of 10pc-12pc this year."

He said next year the carrier was budgeting for zero growth but "we will not change any of our plans or contracts for aircraft".

He said that over the medium term there was strong demand for flights to and from Russia, boosted by the growing wealth of the population, developing business connections and increasing foreign holidays by Russian nationals to destinations such as Spain, Italy and Dubai.

Mr Koshliakov added that the airline was developing Moscow's hub status by investing $500m (£340m) in a new terminal for Aeroflot's use at Sheremetyevo airport. The Terminal 3 development will have an annual capacity of 9m to 12m passengers.